Agency Doctor: How do you secure appropriate fee levels?

As agencies plan for 2016, confidence and a focus on innovation are essential to ensure fee levels reflect their true worth.

There is always a challenge around the corner for those running agencies. As 2015 draws to a close and it is clear recession is behind us, we need to re-examine aspects of our commercial model that may have been challenged in recent years.

2015 has seen a changing tide for our industry with more RFPs, pitch opportunities, new budgets being unlocked and a general sense of business optimism. The PRCA Benchmarking Survey earlier in the year reported a positive outlook from both consultancy and in-house participants alike.

However, during recession margins were squeezed in many areas as clients faced demands to deliver more, for less. This in turn saw our industry often struggle to secure fee increases that supported the salary expectations of staff.

The talent pool became highly competitive in spite of, and in part because of, recession. Over-servicing continues to put a strain on the industry and there are still too many examples of annual campaigns being delivered today for fees that have hardly moved in recent years.

So as we emerge with confidence about the industry outlook, how do we get those fee levels back to where they should be?

Confidence
The time for a lack of self-confidence and quick-fix discounting to secure a deal is over. The work we deliver and the value we add is proven time and again with increasingly smart measurement tools. The industry needs to have a sense of its worth.

Differentiation
To justify that confidence, we must have a point of difference and clear proposition. That’s a tough one in a highly competitive market but it is essential. Be sure your agency’s offer passes the ‘so what’ test and think about when you last challenged it.

Innovation
Our fast-paced, data-driven, integrated environment has every­one running to keep up with change. But we still need to ant­icipate the needs of clients and how technologies and insights can help them navigate  through challenges.

Customer experience
As consumers we all understand the power of positive cust­omer experience – and the perils of getting it wrong. Social media enable voices to be shared and responded to quickly.

Now reflect on your clients and their experience of your business. This goes beyond the delivery of measurable results and enters client engagement and relationship territory. Having robust systems and policies to be sure you are surprising and delighting your clients is a critical factor in your differentiation, negotiating power and cementing long-term relationships.

So as plans and projections for 2016 and beyond take shape, make time to reflect on these critical areas of your business if you want to be in real control of your commercial destiny.

Alison Clarke is principal of Alison Clarke Communications

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